KOHA

As a general rule, when koha is given as an unconditional gift, there is no liability for tax. However, a payment for the supply of goods or services may be subject to tax. An unconditional gift is a donation made to a non-profit body, where the giver (or any relative) does not receive any goods or services in return for the donation.

A non-profit body is any society, association or organization:

	That is not carried on for the profit or gain of any member, and
	Whose written rules do not allow money or property to be distributed to any of its members

GST

A non-profit body registered for GST may earn money from sales or services, and it may also receive unconditional gifts (donations). A non-profit body doesn’t have to account for GST on these gifts.

The following chart (which applies only to GST registered persons) gives a guide to accountability for GST:

SITUATION		CHARGE GST
Funeral	Money given to the bereaved family	No
Funeral	Money given to the Marae Committee	No
Unveiling Headstone	Money given to the bereaved family	No
Unveiling Headstone	Money given to the Marae Committee	No
Wedding	Money given to the married couple	No
Wedding	Money given to the marae committee by wedding guests	No
Building a Meeting House/ Church	Money given to the marae committee to help pay for the new meeting house/ church	No
Hui	Visitors to the marae hold a collection. One of the visitors then presents the money to the marae committee,	No
Commercial Use	The marae grounds are used as a camping ground fore a fee.	Yes
Commercial Use	Tourists are shown around a marae and charged a fee	Yes
Commercial Use	Tourists stay on a marae and are charged a fee	Yes
Commercial Use	A hall is hired to hold a wedding function	Yes
Commercial Use	An organization holds a conference on the marae and is charged a fee	Yes

PAYE

There may be occasions when there is an issue as to whether payments to persons could be wages or are a koha payment to reimburse expenses incurred.

PAYE must be deducted where an employer/employee relationship exists. Factors indicating such a relationship include:

	The employer may provide equipment, office etc.
	The employer has control over the way the work is done
	The work is not done as part of the worker’s independent business.

Thus:

	If a person is employed to look after property or to provide regular services there is an employer/ employee relationship and the non-profit body must deduct PAYE and pay it to the Inland Revenue.
	If a person gives a one-off talk to a non-profit body and is reimbursed for travel costs this will not be regarded as an employer/ employee relationship and no PAYE is required to be deducted.

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